Orecap Invest Corp V.OCI

Why ORX is an easy buy right now

[jfan22]

Based on most recent audited financials (as of Oct 31st 2020), ORX has $7.7M in current assets, mostly cash, and $1.8M current liabilities. That means they have excess short term assets of $5.9M.

As per their last corporate presentation they own:
- 19% MIS (current MC near $17.8M) = $3.4M attributable to ORX
- 4.8% QCCU (current MC near $23.8M) = $1.1M Attributable to ORX
- 26% American Eagle gold (~10M shares)

Assuming ORX retains half of it's shares and they are valued at IPO price of $0.20, this means ORX will retain $1M attributable to ORX.

All this suggests ORX, valuing it's properties, prospectiveness and business at $0, has a value of $10.4M today. With 222.51M shares outstanding, this implies a value of $0.047/share as a hard downward limit.

If you do think ORX's business is valuable, buying in the $0.075-0.1/share range is a no brainer. We've never had so much cash and the equity positions have never been this valuable.

[jfan22]

I forgot to consider that American Eagle shares will be given to ORX shareholders in my calc. Assuming $1M worth are distributed evenly among all 222.51M ORX shares, each ORX share will receive ~0.45 cents in American Eagle shares. This brings the hard downside limit up to $0.051/share ($11.4M of ORX value over 222.51M shares).

[wasluckyonce]

Thanks for that Jfan but the market simply is not interested in gold stocks right now...so many pros predicting next leg up to 2500 gold anytime now and it's supposed to be a fast rise...but the market is not paying any heed to that at all...I personally think gold price is being manipulated by the big boys the banks..

[jfan22]

You're right! No one really cares about gold or gold stocks right now. But identifying good opportunities before everyone else is what investing is all about.  My analysis is all about true value and nothing to do with speculation of what the gold price is doing or the drilling results. Obviously ORX's value is not independent of either of these things, but not very long ago, with

[ggrellette]

Well, not today for that prediction because the POG is down. BTW the POG is ALWAYS being manipulated by the central banks and every other US bank. Otherwise the price would be $5000.00 oz and nobody would buy it at that price. People would be selling their jewellery and every gold merchant would want to buy USED gold for peanuts because that is what they would offer for your used gold.

[ggrellette]

CORRECTION : POG is up around 6 bucks depending on when you look at it. However the 10 year treasury note is up to 1.7 and will still climb higher.